First Read: Sunresin New Materials "Negatives priced in, current valuation..."

Research evidence excerpt

First Read: Sunresin New Materials "Negatives priced in, current valuation..."

5E 1.80 1.77

roadblocks have been cleared, and permit is likely to be granted soon. Financially, for

12/26E 2.65 2.27

each ton of LiOH produced, Guoneng will pay a fixed amount of processing fee, which 12/27E 3.64 2.83

we believe can fully cover Sunresin's total costs, plus another double digit revenue

sharing from lithium sales. Assuming 5,000 tons of lithium sales and a lithium price of Sky Hong

Rmb150k/ton for 2026, Guoneng project could generate incremental net profits of Analyst

cRmb200m, on top of the guided earnings of Rmb1.1-1.2bn (ex-Guoneng). In other S1460520010001

sky.hong@ubs.comwords, based on the above assumptions, for every 1,000 tons of LiOH sales, Sunresin

+86-21-3866 8856

enjoys incremental net profits of cRmb40m. At full capacity and with lithium price of

Rmb180k/ton, we estimate net profits upsides could go up to cRmb450m. Gus Huang, CFA

Analyst

S1460522090006Life science: Robust growth driven by oligo & obesity (GM>60%)

gus.huang@ubs.com

The oligo thesis (deep dive) is indeed playing out, as indicated by the strong beat of +86-21-3866 8541

Novartis's Leqvio sales in Q126 (up 69% YoY, where ex-US sales up 106% YoY, led by

Mandy Liu

China), which serves as the key near term driver for Sunresin's oligo SPSC sales (we

expect its oligo SPSC sales to reach Rmb100m for in 2026E, substantially up from S1460521110001

Rmb15m in 2025). On the other hand, obesity SPSC sales growth in 2026E could remain mandy.liu@ubs.com

robust at 50% YoY growth, in our view, reaching Rmb800m, on the back of Eli Lilly's +86-21-3866 8831

sales of Mounjaro and Zepbound, plus rising sales contribution from Innovent's

Mazdutide and other obesity generics. Moreover, we don't rule out that Sunresin might